How do you record a returned check?
submitted by karen

redsox91

You need to find the original deposit entry and then make a journal entry to cancel it out. You'd credit the bank account and debit either the customer's account or Accounts Receivable to show that the payment didn't go through. If there was a fee, you'd need to record that as an expense too.

jessica

When a check bounces, you just need to undo the deposit you made before. So, you record a negative entry in the bank account and also indicate on the books that the customer still owes you money.

landons beard

If the check is returned because you don't have enough money in the bank, you record it by reversing the original deposit. Credit the bank account and debit the Accounts Receivable to show show that you didn't actually get the payment.